Can both equities and bonds be right?
It’s been a good start to the year, with positive returns on most assets. Upcoming Fed decisions may determine the immediate path of yields. But bonds are back and we think fund flows may push …
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Tag "Equities"
“What should be” versus “What is likely to happen”
China Market Outlook 2023 KEY INSIGHTS Since the Party Congress, China has announced a significant easing in its zero-COVID restrictions and more measures to stabilize residential property, which is encouraging. China is at a different stage of its business cycle
EMEA-Listed ETF Flash Flows
ETFs posted strong net inflows, gathering $5.8bn last week. Equity ETFs captured $3.3bn …
Views in brief: Maneuvering through uncharted territory in a new year
Global tactical asset allocation views brief: Global equities slumped over 2022, posting their worst annual returns since 2008, as Russia’s invasion of Ukraine added to already heightened inflationary pressures and caused the biggest energy price shock since the 1970s. Central
Global IPO Trends 2022
A record year for IPOs in 2021 gave way to increasing volatility from rising geopolitical tensions, inflation and aggressive interest rate hikes. Weakened stock markets, valuations and post-IPO performance have further deterred IPO investor sentiment. As pipeline continues to build,
Feeling our way towards recovery
In the final quarter of 2022, global equities recovered some of the ground lost earlier in the year. Inflationary pressures eased somewhat, and the pace of monetary tightening slowed. The outlook for equity markets remains uncertain in the near term,
The PIMCO Glide Path Construction Proces
The savings and investment plan that one follows over the course of one’s working and retirement life is among the most critical decisions an individual can make. The balance between consumption and savings determines one’s overall quality of life, not
Navigating the new road ahead
2023 Global equity outlook The months of November and December are all about expectations management in most family homes in the UK, as (occasionally unrealistic) children’s expectations for Christmas presents come into conflict with the economic realities of family budgets.
EMEA-Listed ETF Flash Flows – 2022 in Review
• ETFs posted more than $88bn of net inflows in 2022. Despite a challenging backdrop with elevated inflation, monetary tightening and war in Ukraine, Equity ETFs …
Looking Ahead to 2023
End and Beginning of an Earnings Cycle In brief: Decelerating inflation should provide a tailwind for high quality bonds but will likely bring the earnings cycle to an end for most companies. Companies with uncompetitive products or services facing elevated
2023 Natixis Institutional Outlook Survey
After the Gold Rush Institutional investors forced to dig deep for opportunity as they brace for inflation or stagflation in post-pandemic markets. After seeming to recover from the pandemic in 2021, the global economy relapsed into what may be classified as a
What happens when the dollar weakens?
We believe the US dollar is expensive and starting to run on empty. Looking ahead to when the dollar weakens, we expect it to provide a ceteris paribus boost to commodities, emerging market assets and …
Dividends: a strategy for all seasons
Growth strategies have long overshadowed dividend strategies. However, changing macroeconomic conditions have turned the tables and dividend investments are enjoying their time in the sun. While this coincides with value’s long-awaited comeback, value and dividend stocks have distinctive characteristics. We
Crisis & Events S&P 500 Index
This chart shows the growth of $10,000 based on S&P 500 Index performance over the last several years. Although past performance is no guarantee of future results, we believe looking at the market’s overall resiliency through several major crises and
The end of an era
Monthly Investment Outlook: With the September swoon in risk assets, markets have simply moved to unprice the optimism built up over the summer about the prospects of a pause in Fed tightening …
After a Good Run, Value Looks Anything but Exhausted
The 12 months to September 30 were the best for value relative to growth performance since the fall of 2001. It was a huge relief for those value investors who managed to survive the long period of growth ascendance since
Is there a cure for current weakness in Chinese health care stocks?
Health care has been the worst-returning sector in China since the peak of the market last year. Behind this decline has been geopolitical tensions, macroeconomic risks and domestic policy. Long term, the outlook is still encouraging, however, with demographics supporting
Quality Time In Small Cap
Quality investing is an approach well suited to small cap equity. As an asset class, small cap has become notably cheap this year. GMO recently launched a Small Cap Quality Strategy to take advantage of the alignment of attractive long-term
Dividends: Building resilience in a new market reality
The market pivot away from growth stocks over the past year has brought the dividend component of total stock returns back into focus. Dividend-payers in the S&P 500 Index have outpaced the broader market by a significant margin over the
Barometer: Donkere wolken aan de hemel
De vooruitzichten voor risicovollere activaklassen zien er minder goed uit omdat renteverhogingen de economische groei wereldwijd blijven afremmen. De vooruitzichten voor de wereldeconomie worden slechter. Naarmate de centrale banken de rente verhogen om de inflatie te bestrijden, zal niet alleen
Five key outcomes from the 20th Chinese Communist Party Congress
With the book now closed on the 20th Congress of the Chinese Communist Party (CCP), market watchers are busy analysing the various personnel and policy developments as they try to plot the next five years and beyond for …
Re-appraising the case for Latin American equities
Latin America is a region which has long offered promise for investors, but which has seen equity performance disappoint over the last decade. The share of Latin American markets in major equity indices over this period has shrunk, as investor
Why research is so critical when it comes to investing in China
Key takeaways Chinese equities have had a volatile 2022 so far as the country has had to navigate COVID-19 restrictions, property debt concerns and supply chain constraints among many other headwinds China is becoming an increasingly selective market that requires
Small cap growth big opportunity
With inflation running at a 40-year high and the Fed taking aggressive measures, is now the time to allocate to US small cap stocks? Despite their generally lower margins, US small caps have three critical things on their side right
EMEA-Listed ETF Flash Flows
ETFs posted net inflows of $1.2bn last week. Fixed Income ETFs captured $744mn, while Equity gathered smaller net inflows …
Do public equities have a role to play in impact investing?
Impact Investing In terms of asset class, impact investing has traditionally been associated with private capital. Public equities make up just 17% of the USD 502 billion in assets managed in impact strategies1 , a negligible amount compared with the
Investing in volatile times
The investment lexicon is currently dominated by inflation and recession. But what could these terms – so readily used by investors and their advisors – actually …
Strategic Sector Selector
In the third quarter of 2022, global equities resumed their slide with no end in sight after a brief period of hope during the summer. Waiting for a recovery at the moment feels like waiting for Godot. Global central banks
Betere manieren om de wereld te voeden
Voedselzekerheid is door de Oekraïnecrisis een nog urgenter wereldwijd probleem geworden. Beleggers kunnen helpen om oplossingen te bedenken – van boer tot bord. De forse stijging van de voedselprijzen en de bevoorradingsproblemen, die nog verergerd werden door de Russische invasie
Contained EM inflation and higher real yields suggest relative value in local markets
The recent surge in commodity prices has amplified the acceleration in inflation that we have been seeing globally, arising from disruption to global supply chains caused by the pandemic. Expectations just a few months ago were that the drivers …
Impact of the rise in commodity prices on EM equities
A further rise in commodity prices is a key channel through which the conflict in Russia/Ukraine might affect the rest of EM. If the commodity price increase is sustained, some EM countries may suffer from a deterioration in the terms
Seeking reasons to buy US equities
After a 24% year-to-date decline in the S&P 500, we ask what could make us turn positive on equities. A 30% further decline would help but short of that, some combination of the start of recession, VIX above 40 and
Barometer: Aandelen blijven onaantrekkelijk, maar obligaties verdienen meer aandacht
Aangezien de donkere wolken boven de economie nog niet zijn verdwenen, zullen aandelen wellicht verder dalen. Obligaties beginnen er echter aantrekkelijk uit te zien.
Taking stock
Balancing acts. As the Fed walks the line between curbing inflation and averting recession, anxious investors are seeking to balance the two risks. Amid the uncertainty, we believe stock selection matters more. As Q4 begins, we see …
Bracing for a hard landing
Global Asset Allocation Insights Inflation is still stubbornly high, meaning the Fed and the ECB are keeping their feet pressed down on the hawkish pedal for now. However, growth data is turning sharply negative in developed markets as the consumer
The Liquidity Hole Is Expanding
At the end of last year, we described a liquidity hole that we expected would grow and envelop most assets. Last year, the fundamental conditions for assets (particularly bonds) deteriorated quickly, but asset purchases by the Fed combined with huge
Where do we find value in Emerging Market equities?
Emerging market equity returns have been resilient year-to-date in the face of increasing uncertainty over the global economy and rising interest rates. The region remains our preferred choice in our model asset allocation, especially if inflation peaks, which we expect
The autumn hard vs. soft landing puzzle
CROSS ASSET Investment Strategy While a global recession may be avoided, we are likely to see growth deceleration and high inflation (higher cost of living) along with regional divergences. Thus, investors should consider moving to a more cautious stance on
Global Asset Allocation: The View From Europe
It Fooled You Once… Coming out of the annual Jackson Hole meeting, Fed Chairman Jerome Powell’s speech, unsurprisingly, had a strong tone reinforcing the Fed’s intention to fight inflation at any cost, a 180-degree reversal of his ‘inflation is transient’
Is Value Just an Interest Rate Bet?
It seems obvious to so many that interest rates drive the value trade.1 After all, growth stocks2 have much longerdated cash flows than value stocks and thus should be a “longer duration” asset and move more with longer-term interest rates,
Impact investing in listed equities
Impact investing originated in philanthropy and started from a need to close a funding gap in private markets. This to a certain extent explains why the traditional purist definition of impact investing remains constrained to certain asset classes. The landscape
Barometer: Zomerrally is al een verre herinnering
Een zachte landing van de wereldeconomie lijkt steeds onwaarschijnlijker. Dat betekent dat risicovollere activaklassen nog verder kunnen dalen. De stijging van de aandelenmarkten die begon met de hittegolf deze zomer is volgens ons voorbij. Vanaf nu zullen de omstandigheden waarschijnlijk
Finding a Bottom in Equities
In this note, we provide some historical context to equity bear markets, explore the size of equity drawdowns during economic recessions and analyze the key factors driving the severity of equity drawdowns. Most importantly, we try to answer the question:
Positive correlation not necessarily negative for equities!
In the last century, the correlation of equities to bonds was positive; in recent decades, however, it has been negative. Currently, though, it is rising again; a correlation of less than +0.5 is positive for equities, although it results in
Why Fundamentals Matter
"If there is nothing to compare, there is nothing to criticize." Share prices and investors’ interest in fundamentals often have an inverse relationship over shorter timeframes. In speculative periods when stock pricessoar, investors frequently ignore the underlying earnings, balance sheets,
Rising Risk of Recession
May’s reprieve proved short-lived as recession joined inflation fears pushing equity/bond prices lower in June. Concerns have risen as the increasingly hawkish Fed rhetoric at its June meeting suggests a willingness to trade rising …
The persistence of dividend growers
The return of inflation and macroeconomic uncertainty is shaking up equity market leadership. We caught up with Grant Cambridge to discuss why including dividend growers as part of a wider portfolio could help investors dampen these risks, and how 25
Value Spreads Are Back to Tech Bubble Highs: Is Everyone Out There Cray-Cray?
Cliff’s Perspective This adds another three months of data to the May entry in our series of value spread updates. Over the past two months, some portion of the market went temporarily (I hope) insane, punishing value, as we measure
Dipping a Toe in the Water
EXECUTIVE SUMMARY The almost 25% market selloff has removed the S&P 500’s overvaluation, but we are still not at levels generally observed at bear market bottoms. Roughly one-third of our Bear Market Bottom Checklist has triggered. After being outright bearish
Global Asset Allocation: The View From Europe
Market Themes Whatever It Takes 2.0 Keep On Smiling
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